Chronic infection with hepatitis B virus (HBV) greatly increases the risk to develop hepatocellular carcinoma (HCC), and genotypes B and C account for majority of chronic HBV infection worldwide. Although these two genotypes infect similar human population (Asians) via the same (vertical) mode of transmission, infection with genotype C is associated with prolonged active virus replication, delayed HBeAg seroconversion, and increased lifelong risk for HCC. Genotype C is also more prone to develop core promoter mutations, which have been independently associated with HCC risk. Our preliminary studies revealed that core promoter mutations up regulate genome replication and core protein expression when introduced into clones of genotype A and C. We also found that most genotype C isolates with wild-type core promoter sequence produce less pregenomic RNA than corresponding genotype B isolates, leading to lower core protein expression and genome replication. Nevertheless, they are more efficient at virion secretion. Considering that the core protein is a strong immunogen, we hypothesize that its low expression by genotype C prolongs the immune tolerance phase of infection and delays HBeAg seroconversion, whereas efficient virion secretion ensures rapid virus spread in the liver as required for establishment of persisten infection. We also hypothesize that immune clearance mechanisms select for genotype C mutants with augmented replication capacity through core promoter mutations, with the concomitant increase in core protein expression triggering liver damage and HCC risk. In this R21 grant application we will identify the determinants and elucidate the mechanisms responsible for lower genome replication capacity of wild-type genotype C isolates but more efficient virion secretion. We will also test the alternative possibility that the low prevalence o core promoter mutations in genotype B is due to their inability to enhance genome replication in this particular genotype. Our working hypothesis and proposed studies will shed light on the higher prevalence of core promoter mutations in genotype C, and help solve the longstanding puzzle of why genotype C persists longer in the host to induce advanced liver diseases such as cirrhosis and HCC. These studies will also reveal novel control mechanisms in HBV genome replication and virion secretion. Our rich experience and proven track record in characterizing biological properties of HBV genetic variants will ensure successful completion of the proposed study.